Is Bitcoin Trading Legal?

New York’s Bitcoin BitLicense

It is perfectly legal for U.S. Citizens to buy, sell, trade and spend bitcoin both online and in person, but for a the longest time people have been afraid to use bitcoin because of the legal unknowns.

The United States has regulated the buying and selling of Bitcoin with the New York BitLicense.  The Bitlicense applies to any U.S. company that facilitates the sale of bitcoin.  The BitLicense is hard to get because it regulates companies the same as any bank or financial institution, with heavy strict policies and regular 3rd party audits.  These measures keep U.S. citizens protected from Bitcoin Exchange meltdowns like the infamous Mt. Gox in Japan.

You should no longer be afraid of buying and selling bitcoins.  You are still obligated to keep track of your cost basis for tax purposes since you will probably have to claim long term capital gains taxes with the Internal Revenue Service.  Personally I don’t understand taxes at all and rely on a bitcoin portfolio manager to figure that out for me.